Venezuela's foreign refining cost soars 4.5%

In an attempt to achieve growth in the decades ahead, Venezuelan state-owned oil company Pdvsa has been working on the setup and wider development of 11 oil refining projects in American and Asia, specifically in countries in alliance with the Venezuelan Government.

However, according to information provided by Pdvsa's Refining Director Jesús Luongo during the 2nd Comprehensive Congress on Hydrocarbons recently held in Venezuela, cost in foreign refining plans have soared 4.5% as required investments climbed from USD 65.2 billion in 2011 to USD 68.2 in 2012.

For instance, in Brazilian refinery Abreu e Lima, jointly developed by Brazilian state-run oil company Petrobras (60%) and Pdvsa (40%), USD 15.2 billion are required to process 230,000 barrels per day (bpd) as from 2014. Notwithstanding, only USD 13.3 billion were required for said project last year.

To make things worse, as recently reported by Reuters, Petrobras has informed that the aforementioned amount may increase. Furthermore, although the Brazilian oil company has repeatedly expressed its partnership with Pdvsa, the Venezuelan oil company has not invested a single penny in the common project as it still trying to get a loan from Brazilian bank Bndes.   

The Brazilian refinery is not the only exception. It also includes projects in Cuba, Nicaragua, and Ecuador.

It has been unveiled that costs in Pacific Refinery Eloy Alfaro in Ecuador, another project Pdvsa takes part in, have also soared in a year's time. While only USD 11.7 billion were necessary in 2011, USD 12.8 billion are required today.

Translated by Jhean Cabrera